Quarterly Energy Comment

by Bill O’Grady The Market Oil prices have been volatile over the past few months. In October, OPEC producers increased output in anticipation of U.S. sanctions on Iran. However, the Trump administration granted more waivers for Iranian exports than anticipated, leading to more oil supply. As the above chart shows, prices plunged, falling from $78… Read More »

by Bill O’Grady The Market Since mid-Q1, oil prices have ranged from a low of around $64 to a high of $71 per barrel. Prices remain elevated, supported by OPEC production discipline, production problems in several OPEC nations, fears of new Iran sanctions and stable global oil demand. Prices and Inventories Inventory levels remain elevated… Read More »

by Bill O’Grady The Market Over the past quarter, oil prices have ranged from a low of around $56 to a high of $66 per barrel. Prices remain elevated, supported by OPEC production discipline and solid global oil demand. Prices and Inventories Inventory levels remain elevated but have clearly declined from last year’s peak. View… Read More »

by Bill O’Grady The Market Oil prices have recovered strongly from the mid-summer lows. It appears we are establishing a new trading range between $55 and $60 per barrel. This recovery was mostly caused by a steady decline in U.S. domestic crude oil inventories, a weak dollar and OPEC output discipline. We expect OPEC to… Read More »

by Bill O’Grady The Market Oil prices peaked in March around $55 per barrel. There have been a series of lower highs and lower lows, as shown by the lines on the chart. This obvious downtrend has led to a general bearish tone to the market. We don’t necessarily share that level of pessimism; as… Read More »

by Bill O’Grady The Market Since December, oil prices have been ranging between $48 and $55 per barrel. Prices and Inventories Inventory levels remain elevated, reaching historic highs. In the above charts, the one on the left shows the long-term inventory situation, while the chart on the right shows a 12-year history. Normal inventories would… Read More »

by Bill O’Grady The Market Oil prices have broken above their $44 to $52 per barrel trading range in the wake of the recent OPEC output agreement. OPEC In a reversal of recent policy, Saudi Arabia spearheaded an agreement to cut oil production. OPEC has agreed to cut production by about 1.3 mbpd and select… Read More »

by Bill O’Grady The Market Oil prices have rallied since mid-February and are now back into the price range established last autumn. Oil Prices and Inventories Inventory levels remain elevated but should begin their seasonal decline later this month. In fact, working commercial storage hit an all-time high in April, exceeding the levels reached during… Read More »

by Bill O’Grady The Market Oil prices have fallen steadily over the past year, reaching a new low early in the first quarter just below $30 per barrel. Since mid-February, they have staged an impressive recovery. Oil Prices and Inventories This rally has occurred despite historic levels of U.S. commercial crude oil inventories. The chart… Read More »

by Bill O’Grady The Market Over the past year, oil prices fell sharply into the first quarter, remained rangebound from January through March, rallied above $60 per barrel in the spring and early summer, and then slid to new lows in August. Since the August lows, prices have been in a range between the high… Read More »

These reports were prepared by Confluence Investment Management LLC and reflect the current opinion of the authors. Opinions expressed are current as of the date shown and are based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change. This is not a solicitation or an offer to buy or sell any security. Past performance is no guarantee of future results. Information provided in this report is for educational and illustrative purposes only and should not be construed as individualized investment advice or a recommendation. Investments or strategies discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances.

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